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Gull New Zealand Limited March 2010 Biosciences Enterprise Forum.

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Presentation on theme: "Gull New Zealand Limited March 2010 Biosciences Enterprise Forum."— Presentation transcript:

1 Gull New Zealand Limited March 2010 Biosciences Enterprise Forum

2 Agenda  Gull Who We Are and our Market  Gull Philosophy  Gull and Biofuels  Green Wash or Real / Commercial and Sustainable

3 NZ Fuel Market  Homogeneous Product Location Location Location Tyres Tampons and Petrol Every survey = we hate time loss Low margin, high turnover Shops vital support for the business “Bloody Price of Petrol”

4 NZ Fuel Market

5 Gull Overview  Family owned, Western Australia based  Operating for 34 years in Perth  Several divisions  Two Countries

6 Gull Overview  Gull Western Australia (Marketing)  Gull New Zealand (Marketing)  Terminals West (Terminalling)  Terminals New Zealand(Terminalling)  Ecotech Biodiesel (Bio Diesel Production)

7 Gull Overview  Commenced operation with one service station 1976  Opened Kwinana (Perth) Terminal in 1992  Opened first New Zealand outlet 1998  Opened New Zealand Terminal 1999  Acquired Eco Tech Biodiesel 2006

8 Gull Overview  Key Highlights Australia First independent to own and operate a terminal facility Introduced fuel discounting to West Australian market First retailer in West Australia to sell a biofuel at retail ( Gull BioD)

9 Gull Overview  Key Highlights New Zealand The second independent to enter the NZ market Relocation of bulk tanks ex Marsden Point First to offer low sulphur diesel in New Zealand First to sell a biofuel in the New Zealand market

10 Gull Overview  NZ Terminal Largest terminal at Mount Maunganui State of the art Enables import of fuel



13 Key for biofuels  One Terminal One place to receive product One place to blend Never used water in our processes  New service stations Environmentally sound equipment New equipment No 30 year old tank deposits

14 Agenda  Gull Who We Are and our Market  Gull Philosophy  Gull and Biofuels  Green wash or Real / Commercial and Sustainable

15 Philosophy  Vision Purpose Values  Practical, real, understood  Not widely consulted  Not used externally

16 Values




20 Do we live our Values ???  I believe we do Agile, Win, Accountable – daily words  If we do not the consumers will desert us and we will not be here  Our survival is differentiation from the oil majors

21 Biofuel Philosophy ?  Authentic  Accountable  Win  Value our customers

22 Biofuel Cynicism  We buy it sell it make money Petrol, diesel, Moro bars, ethanol, biodiesel

23 Market Reality  People love the freedom of their vehicle  No one will take that away  People do not like being told  People are afraid of changes with fuel  Rome was not built in a day

24 Agenda  Gull Who We Are and our Market  Gull Philosophy  Gull and Biofuels Ethanol Biodiesel  Green wash or Real / Commercial and Sustainable

25 Biofuels 101  Ethanol Ethanol mixes with petrol E10 = 10% ethanol Ethanol is what makes you happy in a beer / wine / vodka Henry Ford designed the Model T to run on ethanol The future – fermented pinus radiata or municipal garbage or CO

26 Biofuels 101  Biodiesel Biodiesel mixes with diesel B10 = 10% biodiesel Made from vegetable oils or animal fats Von (Van?) Diesel invented a new engine that ran on peanut oil 18?? The Future ? – Oil from algae from sewage ponds

27 Our Icon

28 Gull Force 10  First biofuel sold in NZ  1 August 2007  E10 blend. 10% ethanol, 90% premium gasoline  Blended at Mount Maunganui  98 octane  Substitution for 95 RON Premium


30 Gull Force 10  Sold at all NZ Gull branded sites (38 as of 1 March)  “Premium” fuel circa 10 - 15% of retail fuel sold. (91 octane and Diesel dominant)  Premium Newer vehicles Performance seekers

31 Gull Force 10  AA - Same fuel economy as competitor fuel but lower price  Motor sport testing – better performance than Ultimate and Avgas 100  Used by 8 out of 10 top place getters in NZ Rally championships

32 Gull Regular Plus  Launched 2 August 2008  91 Octane E10 fuel  Again a substitution for 100% mineral product  8 Outlets  Volume from Regular Plus outsells GF10 2:1


34 Some Data  30% of our fuel sold has a biofuel content  40% of our service station fuel sold has a biofuel content  Estimate over 140,000 sales of biofuel in February  Two complaints on fuel quality

35 Our Ethanol  Until November 2009 100% ex Fonterra Fermented Dairy Industry by product Made in NZ Previously exported as the surplus from the industrial and potable industries  Fonterra at capacity Purchased in November Brazilian Ethanol  South Central Region of Brazil

36 Economics  Ethanol is Excise Tax Free 44 cpl not paid to Government Without excise tax break ethanol blends more expensive than mineral fuel

37 OK but what does this do ?  300 tonne of carbon reduced per month Best case ! It ain’t going to solve world hunger But not bad for a staff of 12 !  Gull 3 – 4% of market Potential 10,000 tonnes / month NZ industry


39 Biodiesel  The chemistry is not complex Used cooking oil The right ingredients Stir for 5 minutes on the bench It will run your tractor  This stuff does not make 140,000 customers / month happy

40 Biodiesel The Issues  Tallow and edible oil prices track diesel prices  Tallow is only a portion of the cost of a bar of soap  It is too expensive to bring to market just now  This is with a 42cpl government production subsidy

41 Biodiesel The Issues  Our Australian Production Plant is in “Care and Maintenance”  The Biodiesel being sold in NSW is now primarily made in the US with twin government subsidies !! But still good for the environment ?

42 Biodiesel How ?  Small volumes will flow to boutique users  Diesel is a commodity and thus price is king  Obligation possibly the only driver  Even Emissions Trading only offers half a cent for a B10


44 Agenda  Gull Who We Are and our Market  Gull Philosophy  Gull and Biofuels  Green wash or Real / Commercial and Sustainable

45 Basic Issues – “Petrol is bad”  Liquid fossil fuels are so portable; enormously powerful; and damn cheap  There is actually a lot of it left  The extension cord doesn’t yet go more than 150 kms  People do not like public transport  The ICE has driven freedom

46 BUT BUT BUT  The carbon will kill us

47 Market Reality  People love the freedom of their vehicle  No one will take that away  People do not like being told  People are afraid of changes with fuel  Rome was not built in a day

48 Some Home Truth  People are lazy  “Not me not today” Our biofuels are less expensive than conventional fuels (No Excise) They have grown our business Estimate majority of that growth is price driven not green driven  To effect change cannot directly oppose

49 The Journey to Nirvana  Cannot take away the car  Politically unpopular to triple the price of fuel  Long term reality is that western government income is underwritten by excise tax so it will apply to all fuel somehow

50 What is Nirvana  Cars powered off algae from ponds / reactors ?  Waste distilled to fuel ?  Hydrogen ?  Nuclear ?  Carbon Capture + Storage ?  CO to ethanol ?  Do biofuels play a part ?????

51 Oh for a crystal ball…  Gull belief Liquid fuel important for foreseeable future Transport and communication due for major change All fuels will contribute  Fuel oil for ships will produce petrol !  Electric, 1 st Gen, 2 nd Gen Biofuels all grow in importance Pricing carbon is a great step

52 Gull’s Position  Believe we will refuel the motorist and her transport mechanism  There will be a lot less total automotive fuel sold  A lot less locations to get fuel at  Vehicles will be a lot more efficient  A changing category mix  Gull will (must) lead that change

53 BUT BUT BUT again  “The damn stuff you are playing with is causing issues”  Almost always from a position that forgets that petrol emits 2.3 kgs of C02 for each litre.

54 Ethanol some issues  Food for Fuel Any one for an Otago Pinot ?  US Corn 1 in 80% out ???  To distil you boil a lot of liquid

55 Biodiesel some Issues  Food for Fuel American / South American Soy  “Splash and Dash”  Palm oil Orangutan hair in my chocolate Forest removal, carbon emission, erosion,

56 Responsibility is the answer  Brazilian sugar beats US Corn and Pakistani wheat  No Palm Oil  What are Governments subsidizing  So do we need “Standards ??”

57 Sustainability - consultants dream  What Standard ? European ISO Government Common sense  What Indirect effects ?  You want $15,000 to give me a certificate ?

58 Where do we sit  Where is the sustainability standard for petrol and diesel ?  Common sense No Palm oil policy since 2006 Ethanol ex NZ and Brazil  Informed consumer – open supplier Ask Cadbury

59 Nah “Sorry you’re just here for $”  No apologies we are here to pay a return  By definition of an independent we will look for the differentiation  I hope it is deeper than that  I believe it is deeper than that  The consumer will judge our actions

60 No, we are good guys  Founding Sponsor AA Energywise rally  Installing electric vehicle recharge points  Sustainability Champion  Supported for biofuels obligation  Forecourt recycling  Biodiesel investment

61 Even if we are sons of Satan ….  Remember 2.3kgs of C02 for every litre is the base – we don’t start at zero  Proof the fuel can change  Proof the NZ vehicle fleet will not fall over  2 nd Generation has a market

62 I’ll finish with our values  We do give a damn  Agility is needed to make it happen  Winning is the culture and Biofuels are our biggest wins  Respect for each other and for the future

63 “Thanks” and “Questions ?”

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